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My .02 cents on what the future has in store.....

By
Mortgage and Lending with Apex Home Loans NMLS #369577

It has been a long while since I have posted on AR but I have some strong thoughts I would like to offer up.  

 

 Obama's plan to help struggling homeowners is a joke! I know firsthand. I have a Fannie owned loan and meet all the criteria. My loan is with PNC/Nat City. I have been turned down over the telephone for months now. How can I be turned down when they have never seen any income docs??? I have finally completed a loan mod paperwork...  correction.. I have completed 4 loan mod applications, because they kept losing mine, even though they were signed for return receipt.....

 

I have a 2nd with PNC/Nat City - imagine that huh?   After almost a year of promises they actually granted me a mod on my 2nd....  four months later they are asking for back payments because even though i was granted a loan mod saving me $500 per month, they didn't get around to processing my paperwork. yes - my signed, notarized and signed for paperwork... now I am in default... yeah right!!  Did i mention that they froze my LOC a year ago? So today i get a certified letter saying i needed to resign my documents and bring my account up to date (which by their first agreement is up to date) and if i dont pay four months back payments they will not accept my loan mod...  which was accepted several months ago in the first place!

  My house appraised for 780K three years ago... back in the days when all you had to do was show you had a job and you were approved for a 300K LOC...   NO DOC   remember those bad boys??   So i have a first for 260K and a 2nd for 300K    that would mean I owe 560K on a house that is now worth 350K    upside down you say???? Think I am the only one in this boat???

 

Back to my point --  Obama’s plan doesn’t work, Unemployment is still rising, Property values – in most areas – are still declining, Foreclosures are continuing to increase, Credit profiles for American consumers continues to worsen and it is harder to get a loan today than it was last month….   Whew   that was a mouthful!

 

 

So I ask all my AR buddies, Belonger, Burris, Bettag, Suarez, Miljour, Craig, Cook (who has more balls to tell the world what was up with him than anyone of us will ever have)  Sardi?  (He still out here??) and everyone else I have met along the way…..   what the F is going on? How is this mess going to ever get better when the government can’t enforce the rules they make and get the banks to support the American consumer with government money in the first place? And now they make it harder to qualify for a loan????  WTF…………..

  I have three words for everyone… I said this a year ago and I think it hits even harder today ---  Strategic Loan Defaults   ……   I have even been reading commentary from college professors and business experts on how consumers should put shame aside and make the smart business decision and walk away…..   so this leads me to my point and my question for all….

 

What the hell is going to happen when American consumers begin walking away from their homes in masses   it is going to happen and it is going to happen soon!   God bless you all…………..    whew…  I feel better now------

 

PS – sorry guys, gotta bring this up, it really blows me away…..   My 19 year old son who is a sophomore in college and doesn’t have two nickels to rub together was just mailed a pre approved credit card from Bank of America with a credit limit of $5000  - i held back but you know what I really wanted to tell him? Screw the greedy bankers, jack your card up to the max and never make a payment. They had no right to send you the card in the first damn place!!!!

Posted by

 NMLS ID - 369577

MORTGAGE ADVICE - PROBLEM SOLVER 

High Quality Advice - Proven Results

             

contact me directly - 301-332-9540

email me directly - lewisporetz@gmail.com 

"I am not in the mortgage business - I am a highly skilled mortgage banker who is in the customer service business."

 

Comments (9)

Stephen Kappre
KW Hometown - Mantua, NJ
Helping You Home

I have a line of credit now on two different properties that are putting me over the top. I never thought about a mod on them - maybe I should! Your story about the mod is so maddening, however does anything surprise us anymore?? Not really.

Jan 20, 2010 10:24 PM
Stephen Kappre
KW Hometown - Mantua, NJ
Helping You Home

Oh and glad to see you posting again :) Keep it coming.

Jan 20, 2010 10:24 PM
Gerry Suarez Jr.
New American Funding NMLS 6606 - Orlando, FL
FL Mortgage Guru

Missed you dude!

Yea, we have all seen it Lewis, and there is a part in every one of us that knows that scenario (wholesale strategic loan default) can play itself out, and if it does we are all toast.

You're so right on the HAMP's, etc.- I've only seen 1 stick, of dozens that I've been exposed to.

But alas- we are the front lines of the industry and we gotta try and push our way outta this mess. Let's see what the next year brings!

Good look for you!:)

Gerry Suarez, Jr.

Your FHA Loan Pro!

Jan 20, 2010 11:09 PM
Lewis Poretz
Apex Home Loans - Annapolis, MD
Business Development Manager

Very interesting stuff here -  I posted a blog on just about this exact topic several months ago -  I have copied and pasted some reponses to my post... very interested to see if the same people who responded still think the same way?

 

 

 

 

The following responses are from Oct 2009 - sorry pics didn't work on the copy and paste but i think everyone will get the point -  ALL comments welcomed and appreciated -    everyone is in this together.....   if the economy has not effected you, certainly it has touched the life of a friend or a loved one....   what advice would you give to them??

Localism Sponsor Outside Blog

I would continue to pay the mortgage. I made a commitment to the bank to pay it, and with the way real estate works....Next year or in 5 yrs. the house could be worth more than I paid for it.

Perhaps a loan modification would work in this case.

 
9:10pm • #1

Tough question!  I think I would call my lender and lay the cards on the table and see if they would make any adjustments.  I'll assume they may adjust rate or something.  But if I have a good job with no need to move (assuming this is 4-5 years into a 15 yr note) I think I would stick it out and pay it off.  The balance on the mortgage after 5 years would be within 50,000 of 275,000.  By the time I moved, paid closing costs and started over on a new mortgage I would probably be close enough to not be tempted to trash my credit and loose my equity.  Don't get me wrong...I'd still be mad!  Either way I've lost my equity...no use loosing my mind!

Verlyn

 
9:11pm • #2
1 Featured Post Outside Blog

I pretty much agree with Sherry & Verlyn.  If I like the house/neighborhood and don't need to move, I would stay put.  I would also petition for a reduction in assessment and property taxes.  So, I'm going with door number 1.

 
9:55pm • #3

Sorry, but I can't take ethics or morals out of my decision.  If I keep my job and can afford the monthly payments then I continue to pay.  Ethics and morals are what guide us when the going gets tough.  As long as I can make the payment I will live up to my committment/obligation.  The message this sends to my children is priceless.

 
10:02pm • #4
2 Featured Posts Outside Blog

Assuming the person asking the question is experiencing  financial difficulty, short sale would be the 1st option and perhaps a Deed in Lieu would be the 2nd option.  Foreclosure would be the last resort.  Good luck!

 
11:50pm • #5
OCT
20
3 Featured Posts Localism Sponsor

These numbers are a real situation that a past client of mine is in. However, these numbers are no different than the situation millions of Americans are facing. Has anyone seen the statistics on the % of loan mods the government supports and has supplied money for that banks actually have completed. It is pathetic! I know the rules. I have called my mortgage holder. It has been six months and they finally sent me a loan mod package. I had been turned down numerous times over the phone.  OVER THE PHONE! With out documentation.....  it is usually a clerk who makes these decisions....  YET - this bank announces quarterly profits......    hmmmmmmmmm

Recent statistics have shown once a homeowner is more than 25% underwater it can take 10 - 12 years to break even. 

Sherry - No way in the next 5 years the house gains 30% of the value back. We are not even at the bottom yet.   sorry... I wish this was the case but it is not...  great suggestion on the loan mod...  less than 10% of all eligible loan mods have been completed...  

Verlyn - a 15 year note... what a marvelous idea... every mortgage should be no longer than 15 years... but the fact is - a 30 year mortgage hardly pays down at all until after the first 5 years....

Nick - I agree - if there is no compelling reason to move and you plan on staying in the house for a long period of time... suck it up and pay the note!

George - a big hell yeah to ethics and morals... I am right there with you....  now let's talk about B of A, Countrywide, Merrill Lynch, Lehman Brothers, Washington Mutual, AIG, the United States Government.....   the question above is NOT an ethics or morals question   it is a business decision based on what is best for your family......   Let's say you own a business.... and you were bleeding like the example above... what would you do?  Ethics and morals - hell yeah? Set examples for your kids? Hell yeah -   do like the United States Government does and bail out the crooks and develop program for American homeowners and then never police it?   give me a break!

Melinda - Nope   it is not me facing this situation... not yet thank goodness....  I believe a short sale would make the best sense.... let me ask you, you are a Realtor... have you ever sold a short sale and seen them take up to six months because a bank can't get authorization to sell the property because they are so mismanaged??? And then the deal just dies, the bank forecloses and winds up taking 100K less than it would have made in a short sale?????

People - this IS the next wave coming.... calculated foreclosures.... and this will be from Americans with good credit and the ability to repay..... and you know what happens when foreclosures mount?   Property values continue to slide downward.... which will lead to more calculated foreclosures......  The government better act on this and act on this soon!   Thank you all for your comments... keep em coming... this will be the hot topic in the next coming months....

 

 
6:00am • #6
140,783 Points

Lewis: I'm not sure a home should ever be looked at as an investment. For most of us, it's the place we live in. True story: When I was growing up, we lived in a nice home in small town. When my parents sold it years later, my dad calculated the annual percantage rate of return. It was 4%. My dad's point was that there are better investments out  there. Thanks for the post!

 

Paul

P.S. I would keep paying on the note.

 
8:20am • #7
374,559 Points 22 Featured Posts Localism Sponsor Outside Blog

I think that you need to stay in it if you can afford it.  I'm looking at the integrity issue.  If you can afford it, you need to teach your kids that you can't just "walk" when things don't go in your favor.  You can try to sell while you're paying, but you need to keep paying.  Secondly, it's a credit bomb that will become so much more costly to you by walking away.  Again...not moral here, but the long term economic cost because of the credit hits will be astounding....  For the client, abandoning the house ....it'd be short term gain, for long term pain.  Just my .02 cents.

 
8:34am • #8
273,123 Points 59 Featured Posts Outside Blog
First off, I'd get out of the Mortgage Business;) I would stay put. If for whatever reason I wanted to move, then it makes that decision a tad bit more difficult. And the second to last sentence Larry wrote above is deadly accurate. Ethics aside, you'll kill credit if you chose to walk away.  
8:50am • #9
153,507 Points 7 Featured Posts Outside Blog

Stay and pay under the terms of the contract as I promised....... unless I have to move for job or something, then I guess it would be short sale. I don't have that problem here in Texas so I haven't given it much thought.

 

 
8:50am • #10
3 Featured Posts Localism Sponsor

Paul - very interesting comment....  I own a broker shop... just because i make 100% of the deals i sell does not mean i make 100% of all revenue coming in.....  the truth lies in a spreadsheet... check out the link to the calculator below...  very informative.....    there are people who live in houses that are over 50% upside down...  maybe it is because they did a 100% int only loan... maybe because they took out a whopping line of credit.... for whatever reason - it is what it is....  

Larry - I am with you 100%... let's assume that your income has drastically been reduced and you need to take care of your family first.....   do you walk away and rent for 1/2 the cost of a mortgage and hope to stash away some money for a few years from now and rebuild or do you spend every penny you make on the mortgage and pray property values return within 10 years or so?

Sardi Mortgage Inc -   damn I love that ring....   Jason... I believe with the amount of American consumers with bad credit reaching historic rates, the ability to rebuild credit and purchase a home in the near future will become EASIER than ever before.... once the economy stabilizes....   just my .02 cents

Tom - I have given thought about moving to Dallas as you guys have not experienced 50% declines in home values like we have in many other parts of the country.....   but then I would have to be a Cowboys fan.... ugggghhhhhh

 

Check out this link - there is actually a calculator that determines if it makes good business sense to walk away from your mortgage....   amazing...

http://www.payorgo.com/

 

i also find this article very interesting...

http://banking.about.com/b/2008/02/11/more-walk-away-from-mortgage-troubles.htm

 

 
9:08am • #11
OCT
21
 

Stick it out..... I've done similar things many times in my life... Every Time I Financed a Car, it went upside down real fast. I never thought of requesting a short sale on my car, or calling the finance company and telling them "the keys are in the ignition.. come get it". While the risk is apparent when buying a car, it should've been too when we signed our mortgage papers.

 
Bryan
2:17pm • #12

 

Jan 21, 2010 12:05 AM
Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

Lewis... this is very frustrating because Obama's administration puts this gov't help out there as a semi smoke screen... it's like a bait and switch in my mind. Example.."Hey American people... we have a program instituted to help those in trouble...  we care about you all... etc, etc"

Well... people are selected and chosen.. and it's still up to that individual investor...  and my theory behind this is that as long as this is broad casted to the American public, that Obama is implementing helpful programs, that it will gain him votes. But when this crap happens to someone such as yourself, the writing becomes clearer on the wall.  People want to be known for helping out, even if it doesn't work. But as this news spreads, maybe more and more people will wake up.

Secondly, what's even more frustrating is that Obama threw billions of dollars to major companies in the stimulus package and a lot of this was abused... still, large bonus checks were handed out by these same companies...yet the little people still suffer. Mis-management of funds by the gov't....  they are part of this mess that we are in.

In any case... good luck with it Lewis... let's catch up sometime soon...  want to talk to you about a few things...

jeff belonger

Jan 21, 2010 03:27 AM
Gary Miljour
American Financial Network, Inc. NMLS#207208 - Southern Pines, NC
Mortgage Originator NMLS Licensed in AZ and NC

Lewis,

I am so glad to hear from you out there.  Your .02 cents is noted.  The biggest problem with all this government help is that there has been no enforcement.  Now all the lender rules have changed and my biggest fear out there is that no one will enforce the laws already on the book.  The millions of dollars earmarked to help homeowners with loan modifications was great but no one on the government end thought this through when they passed these laws.  No enforcement means no banks really care if they follow the rules and the homeowners again suffer with no help.  We the taxpayers suffer because we have to pay the bill.  Us mortgage professionals suffer because we look like the bad guy in this mess.  Without getting too political, the American Public spoke in MA when they voted in Brown. 

PS, the only clients of mine who got their load modifications done right were the ones who hired an attorney and spend thousands of their own dollars.  Again government dollars at work.  :) 

Jan 21, 2010 03:55 AM
Jen Anderson
Exit By the Bay Realty - Chesapeake Beach, MD

Lewis,  It will be scary if people start walking away from houses.  The modification program does not seem to work.  I have talked to homeowners who have tried to get modifications, sent in the packages multiple times and then get rejected, or told they can't afford it (even though they have been paying the higher mortgage)  or get a temporary one and then can never get the committment for it to be permanent.

Short Sales are hit and miss too.  I had a great offer on my listing.  The 2nd wanted the sellers to sign a payback agreement for the entire mortgage.  The sellers were getting a divorce and with the new expenses of two households they said no.  Now that the first is foreclosing the 2nd is suddenly singing a new tune.  Well, after 4 months the buyers have moved on.  Very frustrating for everyone.

Feb 15, 2010 05:05 AM
Lisa Epstein
Jay Epstein State Farm Insurance - Ukiah, CA

Hi Lewis - Looks like we've both been away from ActiveRain for a while.  Good to see you back!

Feb 19, 2010 12:05 PM
Lewis Poretz
Apex Home Loans - Annapolis, MD
Business Development Manager

Jen - yes, scary and frustrating

Lisa - glad to be back.....   I am refreshed with lot's of pent up content ready to roll out of my fingers into the keyboard   stay tuned....

May 18, 2010 03:52 PM